The Government claims it isn’t thinking about cutting pensioner perks — but it should be

Perhaps
the most intriguing political story in today’s papers is this
one in the Sun. It says that ministers are “drawing up controversial plans”
to axe benefits such as the Winter Fuel Allowance, free bus passes and free TV
licences for all new pensioners. The idea, apparently, is that the poorest new
pensioners will be handed more money via their pension credit. Richer
pensioners will get nothing. The paper goes on to say that…

Actually,
at this point, I should probably relay what a senior Government adviser told me
when I mentioned the Sun’s story to him. “It’s totally untrue,” he said. “We
are not working on any changes.” Ah.

But
if that’s genuinely the case, then it would be a shame. I have already
described why I think there’s a moral and fiscal case for cutting pensioner
perks, but, increasingly there’s a political one, too. It comes in two parts:

The growing
consensus around cutting universal benefits. The Sun is just one of the newspapers
pushing for benefits such as Winter Fuel Allowance to be withheld from the
well-off, and they’re joined by the Lib Dems, a good number of Tory
backbenchers and even some Tory ministers. Labour hasn’t signed up to the same
cause yet, but there’s an opportunity there if they want to take it. It will be
very difficult for one party to argue in favour of pensioner perks for, says,
millionaires, at the next election, when everyone else is arguing against it.

The growing inconsistency
of the Tory leadership’s argument. Over the past few weeks, the Tory leadership
— including David Cameron — has defended its cuts to Child Benefit by observing
that it’s unfair for well-off families to receive it when austerity is biting
down on the least well-off too. But, as I’ve pointed
out before, this could equally apply to other universal benefits. Mr
Cameron is risking inconsistency.

The
policy described in the Sun isn’t perfect in every regard. For instance, although
any fallout might be diluted by making it apply only to new pensioners, I’m not
sure it quite satisfies the promises that
David Cameron made ahead of the last election, as the report suggests. And
then, as the paper says in its leader
column, simple means-testing might be preferable to another expansion of
the “credit” system.

But
at least that policy’s a start, and would mark an important shift away from a
system that still provides hand-outs for the have-lots. The Treasury should think
on it.